Should landlords have the right to refuse DSS tenants?10:43 AM, 20th May 2019
About 4 weeks ago 124
At last the Government has agreed that every letting agent in England and Wales must join an authorised consumer redress scheme to ensure tenants and leaseholders have a straightforward option to hold their agents to account. The law comes into effect from today – 1st October 2014.
Any agent that fails to join one of the three approved redress schemes, The Property Ombudsmen, Ombudsmen Services or The Property Redress Scheme, will face a fine of up to £5,000 from their local authority and could ultimately be closed down if they continue to breach their legal requirement to join such a scheme.
After joining, the agent must comply with the scheme’s Ombudsman decision as failure to do so may result in the agent being removed from that scheme. This may then result in the agent being unable to join another Government authorised consumer redress scheme. By joining one of the schemes, the property professional confirms they will comply with the decision of an Ombudsman if a complaint goes that far.
For years Landlord Action have been instructed by landlords to carry out debt recovery against rogue agents that have taken rent and not passed it to the landlord. Back in 2001, I remember having a conversation with a well-known property journalist, discussing this problem and the fact that letting agents were not regulated or ordered to belong to any kind of redress scheme. I’m really pleased that 13 years later, this is now finally coming into effect.
A word of warning, any landlord/tenant that is using a letting agent should always insist on seeing proof that the agent has Client Money Protection insurance in place. This means if they were to go out of business, their rent would be protected. If the agent is affiliated to the likes of ARLA, NAEA, NALS or Safe Agent, this vital insurance will be in place.
I also feel it should be compulsory for any individual or company trading in the ‘rent-to-rent’ sector of lettings (subletting with owner’s consent), to be a member of one of these redress schemes, as they too are managing a property and handling rents. As a member of the Advisory Council for The Property Redress Scheme, I intend to push for this to happen. Of course, I get to see when things go wrong and am at the receiving end of landlords’ distress when they call for help in retrieving their properties and rent. To date, they have had no redress scheme to report their complaint to.
So, I would like to praise the Government for bringing in these mandatory redress schemes, helping to raise the standards of letting agents and redress process for the consumer.
There are still about 5,000 unregulated letting agents and it will be interesting to see how councils will act and how quickly enforcement can take place if they do not join a scheme. I know to become a member of The Property Redress Scheme the terms are quite simple and cheap.
For me, the biggest challenge in the future will be ensuring that every letting agent has Client Money Protection insurance in place. When this happens, we will know we have really cracked the letting industry in terms of protection for the landlord/tenant consumer.
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